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> Individual landlords don't have market power. The vast majority of rental units are owned by large companies, not individuals. Here in Texas all of the bigge

> Individual landlords don't have market power. The vast majority of rental units are owned by large companies, not individuals. Here in Texas all of the biggest landlord companies set rents to whatever the "YieldStar"[0] software tells them to. YieldStar is essentially used to outsource/whitewash pricing collusion. Personally I'd expect a large % of individual small landlords to be using property management firms to handle their listings/rent collection/maintenance/etc, and for those property management firms to be using something like YieldStar to set their prices. If not now, then definitely soon enough. 0: https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...

neilv 3y ago
A price-fixing company on home rentals, in this market and economy... I'd cheer on officials imprisoning all the execs and board members, seizing and dissolving the company, clawing back gains from investors, etc. And landlords who'd used this company to collude would be offered plea deals, in which they're wiped out financially, and permanently banned from investing in residential properties. Bonus: they can see what it's like to be an exploited renter. The resulting funds can partly compensate some of the renters who were harmed, including many of those impacted by the effect this collusion had on the larger market. Hopefully, that would double as a warning to any other startup founders who want to pull yet another "it's not illegal, if you call it an app" scheme. Justice fantasies aside, at least HN could condemn these awful companies and the people who make them; never celebrate them.
AnthonyMouse 3y ago
> The vast majority of rental units are owned by large companies, not individuals. That's not actually true. The vast majority of rental units are owned by individuals or small and medium-sized companies. The largest apartment owner in the US has 115k apartment units, out of tens of millions: https://www.statista.com/statistics/603416/leading-apartment-owners-in-the-us-by-units-owned/ https://www.statista.com/statistics/603416/leading-apartment... > Here in Texas all of the biggest landlord companies set rents to whatever the "YieldStar"[0] software tells them to. YieldStar is essentially used to outsource/whitewash pricing collusion. Which doesn't actually work because they don't have market power. Any landlord who isn't an idiot would realize that they could set a slightly lower price and fill their empty units immediately, which is profitable as long as the discount is less than the loss of rent from leaving the unit empty until you can find a tenant at the higher price, which it would be if the software is suggesting rents above the market-clearing price. There huge numbers of landlords, they all have the incentive to fill their units quickly and they have no enforcement mechanism to punish anyone who charges a lower price to do it.
- ryan_lane 3y ago
  Most landlords use property managers. In some markets most property managers are using YieldStar. They don't have market power across the entire US, but in some cities they have enough of the market to have pricing power.
  - AnthonyMouse 3y ago
    Only about half of landlords use property managers and less than all of those use YieldStar. If it's suggesting above-market rents that leave more units vacant then anyone who did would be at a competitive disadvantage against anyone who didn't, and then who would use them? This doesn't imply that no one uses them, it implies that it's not an effective mechanism for price fixing. Because it has no enforcement mechanism; nothing to stop any individual landlord from charging a lower price to fill their unit faster to their own private advantage. It's just a computer doing the things landlords have always done -- looking at the existing state of the market to figure out how much to ask.
    - deleted 3y ago
      [deleted]
    - ryan_lane 3y ago
      When the occupancy rate is high across the market, purposely withholding units by using higher than market-rate prices across a large enough percentage of the market artificially inflates the prices. "Large enough" doesn't need to be anywhere near a majority of the market to impact the entire market. There's no competitive advantage to using a lower rate, because the unit is likely to get rented either way. You cannot look at the entire US. You have to look market by market. It's not price fixing across the entire US, but it's absolutely price fixing in particular markets.

neilv 3y ago

A price-fixing company on home rentals, in this market and economy... I'd cheer on officials imprisoning all the execs and board members, seizing and dissolving the company, clawing back gains from investors, etc. And landlords who'd used this company to collude would be offered plea deals, in which they're wiped out financially, and permanently banned from investing in residential properties. Bonus: they can see what it's like to be an exploited renter. The resulting funds can partly compensate some of the renters who were harmed, including many of those impacted by the effect this collusion had on the larger market. Hopefully, that would double as a warning to any other startup founders who want to pull yet another "it's not illegal, if you call it an app" scheme. Justice fantasies aside, at least HN could condemn these awful companies and the people who make them; never celebrate them.

AnthonyMouse 3y ago

> The vast majority of rental units are owned by large companies, not individuals. That's not actually true. The vast majority of rental units are owned by individuals or small and medium-sized companies. The largest apartment owner in the US has 115k apartment units, out of tens of millions: https://www.statista.com/statistics/603416/leading-apartment-owners-in-the-us-by-units-owned/ https://www.statista.com/statistics/603416/leading-apartment... > Here in Texas all of the biggest landlord companies set rents to whatever the "YieldStar"[0] software tells them to. YieldStar is essentially used to outsource/whitewash pricing collusion. Which doesn't actually work because they don't have market power. Any landlord who isn't an idiot would realize that they could set a slightly lower price and fill their empty units immediately, which is profitable as long as the discount is less than the loss of rent from leaving the unit empty until you can find a tenant at the higher price, which it would be if the software is suggesting rents above the market-clearing price. There huge numbers of landlords, they all have the incentive to fill their units quickly and they have no enforcement mechanism to punish anyone who charges a lower price to do it.

ryan_lane 3y ago
Most landlords use property managers. In some markets most property managers are using YieldStar. They don't have market power across the entire US, but in some cities they have enough of the market to have pricing power.
- AnthonyMouse 3y ago
  Only about half of landlords use property managers and less than all of those use YieldStar. If it's suggesting above-market rents that leave more units vacant then anyone who did would be at a competitive disadvantage against anyone who didn't, and then who would use them? This doesn't imply that no one uses them, it implies that it's not an effective mechanism for price fixing. Because it has no enforcement mechanism; nothing to stop any individual landlord from charging a lower price to fill their unit faster to their own private advantage. It's just a computer doing the things landlords have always done -- looking at the existing state of the market to figure out how much to ask.
  - deleted 3y ago
    [deleted]
  - ryan_lane 3y ago
    When the occupancy rate is high across the market, purposely withholding units by using higher than market-rate prices across a large enough percentage of the market artificially inflates the prices. "Large enough" doesn't need to be anywhere near a majority of the market to impact the entire market. There's no competitive advantage to using a lower rate, because the unit is likely to get rented either way. You cannot look at the entire US. You have to look market by market. It's not price fixing across the entire US, but it's absolutely price fixing in particular markets.